Featured image: ⓒ Kabai Ken
In 2011, the World Bank documented the sale of 60 million hectares of agricultural land, two-thirds of which was in Africa. Due to rising population and escalating costs of land, labour and energy, particularly in developed countries, corporations and countries are seeking cheaper sources of food production. Still other countries, such as in the Middle East and North Africa, are susceptible to extreme weather, meaning they have limited food security through domestic production. In both cases, one method to obtain the desired food supply is through land acquisition, as purchasers can own and control production and distribution. It is obvious that the purchase of cheap land is beneficial to the firms, governments and other institutions that acquire it. What is of more relevance, and subject to more debate, is the impact on the communities and countries in which the land is bought.
One of land acquisition’s arguable benefits in LICs is that foreign investment associated with it helps the community’s economy and provides jobs for locals, usually in agriculture and farming. Agricultural investment in Ghana between 2001 and 2008 was estimated to have created 180,000 jobs. These job opportunities are not evenly distributed in the population. In Sierra Leone, there was an increase of job opportunities by 20% for men due to land acquisition, but only 2% for women, likely because the new jobs require more physically demanding and traditionally male-dominated labour on these farms.
Furthermore, this foreign investment can lead to the adoption of technologies and techniques that improves agricultural yield. Often, the land that is acquired in these LICs is underused, meaning either it is not being farmed at all, or it is farmed by large numbers of small-scale subsistence farmers using inefficient methods. The control of a large area of farmland by one farmer allows for economies of scale: since more land is being farmed, it becomes more financially viable for an expensive investment, such as a tractor, to be made that improves food output. Even if there was technology that would be a good investment for such a small-scale farmer, they do not have access to the cash on hand or credit lines available to foreign owners to make such an investment.
In Uganda, the acquisition of a fish farm by a Chinese company provided an example of this improved efficiency. After the takeover, over-fishing in Lake Victoria was reduced and the income of the local workers was increased. The Chinese company also benefitted from access to the local market and cheap prices, creating sustainable and co-existing natural and agricultural systems.
The increase in jobs and agricultural production created by land acquisition should increase government tax revenue. The organisations that acquire land and use it for commerce will pay taxes on the produce of that land, and the new employees working there will too. Given the prevalence of the informal economy in many LDCs, on which the government cannot assess taxes, or at least do so with any accuracy, the incorporation of these workers into the formal economy will almost certainly increase their tax contributions in the aggregate.
The advent of larger-scale agricultural production also motivates infrastructure improvements to facilitate this economic progress. This often includes roads for internal transport and ports from which to ship the produce. Furthermore, the likely increase in government revenue mentioned above means the government’s means to do so should be greater than before – though such infrastructure projects are often approved for loans regardless due to projections of future growth they will create. In this way, the whole economy, and whole country, can reap the benefits of land acquisition.
Indeed, this array of benefits was borne out in a case study in Sierra Leone on the impact of land acquisition by a biofuel company on the local population. The survey was taken from 882 households and shows that there was an overall increase in income. While inequality did increase too, this was because landlords saw an average increase in income of 89%, compared to an increase in income for residents of 48%.
The above land acquisition deals are undoubtedly beneficial to all. However, these cases that involve no abuse of power are, sadly, often in the minority. On many occasions, land acquisition has been economically detrimental to the ordinary people of the area, as smallholding farmers who worked the land that was sold to foreign interests are often displaced without much, if any, compensation. 20,000 Ugandan farmers were evicted by foreign investors from a pine plantation due to a recent land deal; another example from 2011 saw 1000 Liberian farmers forcibly relocated, equivalent to 30% of the local population.
The majority of the unethical practices that often accompany foreign land acquisition are facilitated by poorly-defined or informal laws around land ownership. Many subsistence farmers hold their land under informal agreements, meaning they lack rights of tenancy or ownership. The firms or governments that acquire this land thus can, and indeed have a right to, expel the locals from the land on which they rely.
The informality, or in some cases non-existence, of land contracts prior to purchase is not the only issue, as many of the legal documents for these purchases are incredibly short. For example, a 100,000-hectare agreement in Mali had a contract only six pages long. The extreme brevity of this agreement shows it could not possibly have adequately established the necessary rights, responsibilities, covenants and other stipulations necessary to prevent abusive behaviour.
Investors do not only capitalise on the vagueness of property laws but also do not heed local, national or even international laws. In a rubber farm in Libya a Chinese company exploited the vague terms of its acquisition contract to and there have been numerous reports of child labour and low wages. However, the government is often inclined to turn a blind eye due to contracts they may have with the investors, and, even if they should bring the offenders to court, the firms and countries that acquire the land are rich enough that they can escape consequences.
A spokesperson for the International Food Policy Research Institute said that governments in LDCs may “not always consult with or get the consent of people who will be affected” when allowing an investor to acquire land. This is perhaps too generous to these governments. Senegal in particular has acted egregiously towards its poorer, rural citizens in this respect. In 1964 (through the National Dominion Law), the government created elected councils for rural areas to look after the land – including the supervision of its allocation. This means the government was the ultimate owner of the land which these subsistence farmers worked; therefore, it was theirs with which to do as they pleased, including leasing or selling to foreign investors and evicting the locals.
A similar situation has emerged in Tanzania, where rural councils have sold land to overseas investors without the consent of its inhabitants. As a consequence of her resistance, that is, failure to vacate the land she was living on, a cattle herder from Ngorongoro, in northern Tanzania, said that, “My home was completely burnt by the police. I have nowhere to live. My children have disappeared. I feel like a refugee in her own country.” These are not the actions of a dispassionate foreign entity, but of her own government, abusing her rights and exploiting their power for the profits available from foreign investment.
Land acquisition in Africa has the potential to be a mutually beneficial arrangement, supporting economic growth for local communities and providing investors with access to cheap land and strong returns. However, this is far from reality, with most land acquisition projects in Africa resulting in few, if any, tangible economic benefits for the locals, as well as frequent abuse of their property rights and destruction of their communities. When land acquisition is as exploitative as currently is in Africa, the term ‘land grabbing’ – defined by Oxfam as land acquisition that violates human rights, avoids transparent contracts and ignores impacts on local people – is perhaps more apt.